Question

Principle Amt: $5000, 8% compounded continuously;
How many years would it take for the investment to grow to $7000?

Answer 1

Anybody know the formula?

Answer 2

A = P e^ (rt)

Answer 3

ok, now we have A=5000^(.08*t) ?

Answer 4

A=5000 * e^(.08*t)

Answer 5

sorry that is what I meant....how do you solve for t now?

Answer 6

What's A?

Answer 7

$7000

Answer 8

Right, we are trying to grow from 5000 to 7000?

Answer 9

Yep, make sense, so plug it in in order to to figure out t :)

Answer 10

7000=5000e^(0.08*t) LN both sides to get LN7000=e^(.08*t) ?
Or do you subtract 5000 from 7000 then LN both sides to get LN 2000 = e^(.08*t) ?

Answer 11

7000=5000e^(0.08*t)
-> e^(0.08*t) = 7/5
LN both sides :

Answer 12

so you divide 7000/5000 and 5000/5000 to separate the e^(.08*t)?

Answer 13

Always!

Answer 14

so it should now read LN (7000/5000)=.08*t ?

Answer 15

ok, got it!!! Thanks for all your help!!!

Answer 16

The steps always the same :)